December 2, 2025 • 7 mins
Wairarapa farmer and one of NZ’s leading sheep breeders. Today, he ponders the state of farming and our economy.
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Speaker 1 (00:00):
All around the country on the country today. Why are
rapper Derek Daniel, one of New Zealand's best known sheep breeders. Derek,
I know you've got some reasonable rain overnight. You're dry,
not unusual for this time of the year, but any
rain would be welcomed.
Speaker 2 (00:15):
Yeah.
Speaker 3 (00:15):
Look it's still raining here Jamie. It's going to be
huge relief for people, especially out towards the coast because
there's a big rainfall gradient from the Terror Mountains and
then the Ruhenes out to the coast. This will be
hugely appreciated in the Hawks Bay as well. That it's
going to wake up the whole sheet and beef trading, lambs, etc.
Speaker 1 (00:38):
Well, sheep and beef and we're going to discuss this
with Jen Corkran from Rabobanks. I'll keep my powder dry away,
but a sheep and beef, beef and lamb going at
great guns and it's all a supply and demand equation.
The dairies calling its jets.
Speaker 3 (00:52):
Yes, that's exactly what's happened minus four point three percent
last night with a dairy trade auction sheet and beef
riding high with shortage of beef around the world and
Funnily enough, Jamie, people love their red meat and they
are flocking back to red meat, and that's good for us.
But you have to keep in mind that we've had
(01:12):
a couple of really tough years. Most shedd and beef
farmers lost money two years ago and we've got makeup
to do. The general population won't understand that, and they
don't really understand either that dairy has been the biggest
factor in increasing this prosperity of New Zealand over the
(01:34):
last twenty years. You don't see that in the media,
but exports raising from five billion to twenty six billion.
That has enabled us to buy cars and oil and
coffee and so on. We ride on the wave of
dairy conversions.
Speaker 1 (01:51):
Interesting. I mean, the smartest politician in my lifetime was
John Key, and you know he famously said, rightly or wrongly,
where Fonterra goes, New Zealand goes a fair But to
that argument, you want to pick up on an article
in Farmers Weekly by one of my favorite farming academics,
professor Keith Woodford, on the average rate of return for
(02:11):
sheep and beef over the last five years. Now, these
numbers might be out of date, now with these record returns,
but you're still not making a fortune.
Speaker 3 (02:20):
Yeah, a return on capital of zero point seven percent
health athetic, Yeah, and the five years before that I
think was one point nine percent. So what's causing this.
Jay price of land underpins everything. It's hard to beat
a subsidy. So this subsidy on carbon has meant that
(02:42):
the price of hill country in particular is escalated, and
therefore the return on capital from farming just does not match.
So that phase may be over, but we now have
a smaller supply of farmland. And the other Jamie is
it's so easy to borrow money now. Prior to nineteen seventy,
(03:05):
I'm going back a long way, but it was really
hard to borrow money. So the price of houses, the
price of land was kept low. And then we had
a decade of high inflation in the seventies and the
bank thought, well, we have protection against we have a
butfer against someone going out of business because the price
of land just keeps going up. So they've just climbed
(03:28):
on that and they've leveraged the money supply hugely, and
here we are with houses which were eighty six hundred
average in nineteen seventy eighty six hundred more than one
hundred times high. So I've suggested to an economist or two,
maybe we should have an inflation rate of minus one
(03:51):
to minus three percent.
Speaker 1 (03:52):
Well, hang on, Derek, that's called stagflation. That's worse than inflation.
Speaker 3 (03:56):
Well, I don't know, is it really? I mean, at
some point, Jomie, you've got to have a reality check.
We've got a government borring seventy five million dollars a
day to prop up an unrealistic economy. When are we
going to face the music?
Speaker 1 (04:11):
Can I just go back to the carbon farming thing,
because I know you're hot under the collar about this,
and you are a farmer, forester. You grow lots of
pine trees. But right tree, right place? Do you think
the battle has been won against carbon farming? I think
in twenty years time, we're going to look back on
this as the worst ecological mistake we've made in the
history of this country. I hope I'm wrong.
Speaker 2 (04:32):
I totally agree.
Speaker 3 (04:33):
Look, it's been a tax forced on us by European
nations in particular, and it's under the false pretenses said
cabin dioxide is evil and methane is evil, and get this,
our negotiators in Paris rolled over and said grass does
(04:55):
not sequest a carbon dioxide.
Speaker 2 (04:56):
What a lie?
Speaker 1 (04:58):
So do you agree with my theory on this one?
And I'm sure you're well. Sorry to interrupt here, but
most sheep and beef farms, especially the extensive ones, the
ones like you're operating, are totally carbon positive already. They
should be getting a check from the government, not an invoice.
Speaker 3 (05:13):
Yeah, wouldn't that be nice? And yeah, instead we've given
up revenue earning land. I think you were right in
saying before we started this broadcast that the world's going
to be a wash with trees and largs in twenty
thirty years time, and they'll be worthless and we will
have wasted a lot of land, a lot of employment,
(05:36):
and yeah, and we'll be poorer for it.
Speaker 2 (05:39):
Go broke. That's what's going on.
Speaker 1 (05:42):
No argument for me on that one. Are why rarely start?
Of course, one of our leading sheep breeders, you are
what are you breeding these days? You're still breeding the nudies,
the sheep without any wall or is all coming back
into vogue herek?
Speaker 3 (05:54):
Yeah, No, we sure are, but of course wall prices
come up a bit, which is I think slowing down
the transition of farmers who have decided that wolve's a
worthless and they want to totally get out of sheep
with wool. But our two to thram selling this season, yeah,
we're up a bit in numbers and Romney's are still
(06:15):
popular and it will be in the new year, Jomie,
that will test the market for our neody ramlambs and
our Brazilians and so on.
Speaker 1 (06:25):
So that's a politically incorrect name for a sheep.
Speaker 2 (06:28):
Derek, Well, I don't know. I made it up. I
don't know. I haven't been taken to court with it.
Speaker 1 (06:34):
Just you go broke, someone will have a crack at you.
Let me just finish with Daniel's theory of relativity. And
I think this is a quote again from the seventies.
We're both guilty of going back there, Derek. But it's
just putting the price of wool into some historical context.
Speaker 3 (06:51):
But yeah, sure, you're a friend of mine. Phil Gascott
had his first year farming in nineteen seventy three. He
averaged two dollars fifty greasy for his wool. I mean
that's a cross everything bellies, et cetera. The cost to
share of sheep was a twenty two cents, twenty two cents,
and at that in that year, the New Zealand dollar
was buying a dollar forty nine American, and that started
(07:14):
falling away. By nineteen eighty four it was forty four cents.
But I traveled overseas in the middle of nineteen seventy
five I exchanged all my hard earned dollars for American dollars.
I've got a dollar twenty nine American for every New
Zealand dollar. So we were riding high at that time,
and then we sunk to a huge low in the
(07:34):
nineteen eighties.
Speaker 2 (07:35):
It's been a long way back.
Speaker 1 (07:37):
Yeah, Well, go to the UK now. It's not for
the fainthearted buying a pint over there, Derek. We could
chat all day about your playboy days in the seventies,
but I haven't got time. Always good the chat, though,
I joways enjoy your contribution here on the country.
Speaker 2 (07:50):
Yeah, me too, Thanks, Jamie Fuss
All around the country on the country today. Why are
rapper Derek Daniel, one of New Zealand's best known sheep breeders. Derek,
I know you've got some reasonable rain overnight. You're dry,
not unusual for this time of the year, but any
rain would be welcomed.
Speaker 2 (00:15):
Yeah.
Speaker 3 (00:15):
Look it's still raining here Jamie. It's going to be
huge relief for people, especially out towards the coast because
there's a big rainfall gradient from the Terror Mountains and
then the Ruhenes out to the coast. This will be
hugely appreciated in the Hawks Bay as well. That it's
going to wake up the whole sheet and beef trading, lambs, etc.
Speaker 1 (00:38):
Well, sheep and beef and we're going to discuss this
with Jen Corkran from Rabobanks. I'll keep my powder dry away,
but a sheep and beef, beef and lamb going at
great guns and it's all a supply and demand equation.
The dairies calling its jets.
Speaker 3 (00:52):
Yes, that's exactly what's happened minus four point three percent
last night with a dairy trade auction sheet and beef
riding high with shortage of beef around the world and
Funnily enough, Jamie, people love their red meat and they
are flocking back to red meat, and that's good for us.
But you have to keep in mind that we've had
(01:12):
a couple of really tough years. Most shedd and beef
farmers lost money two years ago and we've got makeup
to do. The general population won't understand that, and they
don't really understand either that dairy has been the biggest
factor in increasing this prosperity of New Zealand over the
(01:34):
last twenty years. You don't see that in the media,
but exports raising from five billion to twenty six billion.
That has enabled us to buy cars and oil and
coffee and so on. We ride on the wave of
dairy conversions.
Speaker 1 (01:51):
Interesting. I mean, the smartest politician in my lifetime was
John Key, and you know he famously said, rightly or wrongly,
where Fonterra goes, New Zealand goes a fair But to
that argument, you want to pick up on an article
in Farmers Weekly by one of my favorite farming academics,
professor Keith Woodford, on the average rate of return for
(02:11):
sheep and beef over the last five years. Now, these
numbers might be out of date, now with these record returns,
but you're still not making a fortune.
Speaker 3 (02:20):
Yeah, a return on capital of zero point seven percent
health athetic, Yeah, and the five years before that I
think was one point nine percent. So what's causing this.
Jay price of land underpins everything. It's hard to beat
a subsidy. So this subsidy on carbon has meant that
(02:42):
the price of hill country in particular is escalated, and
therefore the return on capital from farming just does not match.
So that phase may be over, but we now have
a smaller supply of farmland. And the other Jamie is
it's so easy to borrow money now. Prior to nineteen seventy,
(03:05):
I'm going back a long way, but it was really
hard to borrow money. So the price of houses, the
price of land was kept low. And then we had
a decade of high inflation in the seventies and the
bank thought, well, we have protection against we have a
butfer against someone going out of business because the price
of land just keeps going up. So they've just climbed
(03:28):
on that and they've leveraged the money supply hugely, and
here we are with houses which were eighty six hundred
average in nineteen seventy eighty six hundred more than one
hundred times high. So I've suggested to an economist or two,
maybe we should have an inflation rate of minus one
(03:51):
to minus three percent.
Speaker 1 (03:52):
Well, hang on, Derek, that's called stagflation. That's worse than inflation.
Speaker 3 (03:56):
Well, I don't know, is it really? I mean, at
some point, Jomie, you've got to have a reality check.
We've got a government borring seventy five million dollars a
day to prop up an unrealistic economy. When are we
going to face the music?
Speaker 1 (04:11):
Can I just go back to the carbon farming thing,
because I know you're hot under the collar about this,
and you are a farmer, forester. You grow lots of
pine trees. But right tree, right place? Do you think
the battle has been won against carbon farming? I think
in twenty years time, we're going to look back on
this as the worst ecological mistake we've made in the
history of this country. I hope I'm wrong.
Speaker 2 (04:32):
I totally agree.
Speaker 3 (04:33):
Look, it's been a tax forced on us by European
nations in particular, and it's under the false pretenses said
cabin dioxide is evil and methane is evil, and get this,
our negotiators in Paris rolled over and said grass does
(04:55):
not sequest a carbon dioxide.
Speaker 2 (04:56):
What a lie?
Speaker 1 (04:58):
So do you agree with my theory on this one?
And I'm sure you're well. Sorry to interrupt here, but
most sheep and beef farms, especially the extensive ones, the
ones like you're operating, are totally carbon positive already. They
should be getting a check from the government, not an invoice.
Speaker 3 (05:13):
Yeah, wouldn't that be nice? And yeah, instead we've given
up revenue earning land. I think you were right in
saying before we started this broadcast that the world's going
to be a wash with trees and largs in twenty
thirty years time, and they'll be worthless and we will
have wasted a lot of land, a lot of employment,
(05:36):
and yeah, and we'll be poorer for it.
Speaker 2 (05:39):
Go broke. That's what's going on.
Speaker 1 (05:42):
No argument for me on that one. Are why rarely start?
Of course, one of our leading sheep breeders, you are
what are you breeding these days? You're still breeding the nudies,
the sheep without any wall or is all coming back
into vogue herek?
Speaker 3 (05:54):
Yeah, No, we sure are, but of course wall prices
come up a bit, which is I think slowing down
the transition of farmers who have decided that wolve's a
worthless and they want to totally get out of sheep
with wool. But our two to thram selling this season, yeah,
we're up a bit in numbers and Romney's are still
(06:15):
popular and it will be in the new year, Jomie,
that will test the market for our neody ramlambs and
our Brazilians and so on.
Speaker 1 (06:25):
So that's a politically incorrect name for a sheep.
Speaker 2 (06:28):
Derek, Well, I don't know. I made it up. I
don't know. I haven't been taken to court with it.
Speaker 1 (06:34):
Just you go broke, someone will have a crack at you.
Let me just finish with Daniel's theory of relativity. And
I think this is a quote again from the seventies.
We're both guilty of going back there, Derek. But it's
just putting the price of wool into some historical context.
Speaker 3 (06:51):
But yeah, sure, you're a friend of mine. Phil Gascott
had his first year farming in nineteen seventy three. He
averaged two dollars fifty greasy for his wool. I mean
that's a cross everything bellies, et cetera. The cost to
share of sheep was a twenty two cents, twenty two cents,
and at that in that year, the New Zealand dollar
was buying a dollar forty nine American, and that started
(07:14):
falling away. By nineteen eighty four it was forty four cents.
But I traveled overseas in the middle of nineteen seventy
five I exchanged all my hard earned dollars for American dollars.
I've got a dollar twenty nine American for every New
Zealand dollar. So we were riding high at that time,
and then we sunk to a huge low in the
(07:34):
nineteen eighties.
Speaker 2 (07:35):
It's been a long way back.
Speaker 1 (07:37):
Yeah, Well, go to the UK now. It's not for
the fainthearted buying a pint over there, Derek. We could
chat all day about your playboy days in the seventies,
but I haven't got time. Always good the chat, though,
I joways enjoy your contribution here on the country.
Speaker 2 (07:50):
Yeah, me too, Thanks, Jamie Fuss
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